Nondisclosure and confidentiality agreements can be an essential part of your business. These agreements protect the confidentiality of the trade secrets and important data for your company. They are not just for inventors or companies with secret recipes, though. They are necessary for any business that might be disclosing information that is commercially valuable or that may be required to be protected under state and/or federal law.
Starting on January 1, 2020, the California Consumer Privacy Act begins. This new law will require consumer information to be kept private and confidential, among other things. As part of this law, nondisclosure and confidentiality agreements will be even more important for your business. A California business attorney can help you ensure that you have an effective and enforceable agreement in place that is tailored to the unique needs of your company.
Consumer Data Access
In today’s world, it is rare that a company does not collect at least a little bit of data from its consumers. At minimum, the company will likely collect the basic information such as name, address, phone number, email, and shipping address. Under the new California laws, that information must be kept confidential. Considering that many of your employees may have access to that information, a confidentiality agreement or nondisclosure agreement will be absolutely necessary for any employees who have access to databases, computer systems, or other forms of data storage.
Proprietary Information Disclosure/Access
Aside from employee and consumer data, nondisclosure and confidentiality agreements are also a must for anyone who has access to your company’s information including customer habits, customer lists, vendor sources, inventions, business models, and trade secrets. Your trade secrets are especially valuable and must be kept confidential in order to be afforded legal protection. The court will not punish theft of a trade secret if you have not done anything to protect it.
The most important step is to create a nondisclosure or confidentiality agreement. Do not limit your concept of “access” to the person who has access to your computer or provides network maintenance. Consider your marketing department, outside marketing consultant, or vendors that may have access to that information, as well.
Mergers, Potential Investors, and Acquisitions
If you are considering selling your business or merging with another company, you need to have nondisclosure and confidentiality agreements signed by everyone involved. A potential buyer will often want to see trade secrets to ensure their purchase is valid, as will potential investors or new business partners. Ensure that everything is protected in the event the deal falls through.
Contact a California Business Attorney Today
If you are not sure how to protect your business, or whether you need to protect your business, contact the attorneys at Verhagen Bennet LLP today. We can advise you of your legal options and tailor agreements unique to your business model and needs.
© 2019 Verhagen Bennett LLP — This article is for general information only. The information presented should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.